Dependence On India For Energy

Nepali is becoming dependent on India even on electricity as in the case of consumer items and industrial raw materials. Import of electricity from India has been rising by the year in lack of adequate generation inside the country to meet the rising demand. So much so that the country may have to remain in darkness were India not to provide electricity.

Demand of electricity rises by around 100 MW every year. The Nepal Electricity Authority (NEA) has started to increase import from India due to rising load-shedding in lack of adequate supply. The NEA will import 337 MW in the current fiscal year to minimize load-shedding. It was 237 MW last year. The NEA projects that there can be load-shedding of up to 13 years in February, March and April in 2016 even with import from India. Dependence on India for energy will not end until a few big projects including Upper Tamaksohi are completed.

Import constituted 23 percent of the total demand last fiscal year. It will cross 25 percent in the current fiscal year. Demand is projected to rise to 1396 MW this year while installed capacity is just 787 MW including thermal plants. Demand was 1291 MW last year. A total of 116 MW was imported from India in the fiscal year 2070/71. Indian Prime Minister Narendra Modi during his Nepal visit last year had announced to double export of electricity to Nepal to resolve the short-term energy problem of Nepal. He had also advised to complete trans-national transmission lines soon to import additional electricity from India.

The policy and programs for the current fiscal year has aimed to limit load-shedding to eight hours and the government has expressed commitment to bear the losses suffered while importing electricity from India. The earthquake has affected construction of big projects like Upper Tamakoshi, Rasuwa Gadi, Sanjen, Bhotekoshi, Khanikhola and others. These projects will be delayed by at least a year, according to the respective project chiefs. The NEA has planned to increase import from India with no signs of big projects being completed for two years.

The 30 MW Chameliya being developed by NEA and 50 MW Upper Marsyangdi constructed by Sino Hydro are expected to be completed in the current fiscal year. But Chameliya may not be completed in the year if the NEA does not resolve the problems soon while there is problem in supplying electricity generated by Upper Marsyangdi to the the load center in lack of transmission line from Lamjung to Bharatpur.

The Dhalkebar-Mujaffarpur transmission line will be completed this year and an additional 80 MW can be imported even if the substation in Nepal will not be completed. More electricity can be imported through the transmission line in the next fiscal year. The trans-national transmission lines have already been booked in a way to wheel 1200 MW. Similarly, the NEA and subsidiary companies are constructing or preparing to start construction of projects with combined installed capacity of 1044 MW and private sector 1205 MW. A whopping trade deficit of Rs 497 billion out of the total trade deficit of Rs 616 billion in the first 11 months of the last year was with India. The deficit will rise further once import of electricity rises.

The private sector feels that dependence on India for energy has continued in lack of investment-friendly environment. Chairman of the Hydropower Committee under the Federation of Nepalese Chambers of Commerce and Industry (FNCCI) Gyanendra Lal Pradhan claims the situation has arisen with the government merely making announcements to reduce load-shedding but not implementing the plans.

“The government last year had announced a grant of Rs 5 million for every MW but that has not been implemented even as the budget for new fiscal year has arrived. The government does not implement decisions it has announced. On what basis would promoters trust the government to increase investment?” he asks. He claims that Nepal can become self-dependent in energy within a few years if the government were to create investment-friendly environment by providing the facilities announced for the private sector.